Trade-Ideas LLC identified

CST Brands

(

CST

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified CST Brands as such a stock due to the following factors:

  • CST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.2 million.
  • CST has traded 228,886 shares today.
  • CST traded in a range 282.5% of the normal price range with a price range of $2.11.
  • CST traded above its daily resistance level (quality: 140 days, meaning that the stock is crossing a resistance level set by the last 140 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on CST:

CST Brands, Inc., through its subsidiaries, operates as an independent retailer of motor fuel and convenience merchandise items in the United States and eastern Canada. The stock currently has a dividend yield of 0.7%. CST has a PE ratio of 19. Currently there are 4 analysts that rate CST Brands a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for CST Brands has been 562,300 shares per day over the past 30 days. CST has a market cap of $2.9 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.18 and a short float of 6.1% with 8.88 days to cover. Shares are down 2.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CST Brands as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 35.7% when compared to the same quarter one year prior, rising from $14.00 million to $19.00 million.
  • Net operating cash flow has increased to $88.00 million or 25.71% when compared to the same quarter last year. In addition, CST BRANDS INC has also modestly surpassed the industry average cash flow growth rate of 19.63%.
  • The revenue fell significantly faster than the industry average of 13.5%. Since the same quarter one year prior, revenues fell by 17.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CST BRANDS INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CST BRANDS INC reported lower earnings of $1.96 versus $2.61 in the prior year. For the next year, the market is expecting a contraction of 5.6% in earnings ($1.85 versus $1.96).

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